Seiss grant as income

_AandL_

Does anyone know any lenders that are accepting the self employment grant as income?

ACG

I dont think any lenders are accepting grants as income. 

K_S

_AandL_ said:

Does anyone know any lenders that are accepting the self employment grant as income?

@_AandL_ What ACG said. Generally speaking, lenders will only consider sustainable income for affordability purposes. A one-off grant due to a pandemic will not fall in that category.

_AandL_

Thank you for the replies. Was pretty sure this was the case! 

ACG

The latest grant especially, you have to say your business has been affected (by 30% I think). As a lender, it would not make sense to lend to someone whose business has had a 30% drop in income. Im not sure how you would defend that complaint for a miss sold mortgage. 

K_S

@acg I have an in-flight case where the  applicant (they're a tutor) has claimed SEISS 3 but 2020/21 income is about 20% over prior year due to the boom in online coaching.

From what I know, the requirement was that the business be expected to have a "significant" reduction in income over the current tax-year due to Covid, with no number put on it.

The lender hasn't queried it (yet) and I was advised against getting into the details of why they took SEISS beyond checking and confirming that business is healthy with no big drop in current year profits. Let's see how it goes.

ACG

The 4th grant (here) says:

You must also declare that:

• you intend to continue to trade
• you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus

It is obviously down to you and the lender. But in the industry we work in I would not be submitting a case where the customer is saying they believe there will be a significant reduction in profits. Significant is open to interpretation, but that is not a complaint I would want to defend. 

_AandL_

@ACG @K_S Are there lenders that don’t tend to query it? I’ll find out if I’m back at work on April 5th. I took out the grant because the government closed the doors to the business. I’ll be back to normal trading once we get the green light to open again. 

K_S

_AandL_ said:

@ACG @K_S Are there lenders that don’t tend to query it? I’ll find out if I’m back at work on April 5th. I took out the grant because the government closed the doors to the business. I’ll be back to normal trading once we get the green light to open again. 

@_AandL_ With all due respect, I think you're missing the point. If you've taken SEISS because of a downturn in income, lenders are unlikely to consider. If you've taken SEISS but can evidence healthy income, then lenders may consider it.

Other than a few lenders like NatWest who decline SEISS applicants straight away, it's not the SEISS itself that matters, it's what impact Covid has had on your business. I hope that makes sense.

K_S

ACG said:

The 4th grant (here) says:

You must also declare that:

• you intend to continue to trade
• you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus

It is obviously down to you and the lender. But in the industry we work in I would not be submitting a case where the customer is saying they believe there will be a significant reduction in profits. Significant is open to interpretation, but that is not a complaint I would want to defend. 

@ACG It's the same statement for SEISS 3 as well. I ha this exact question and queried about how much digging into SEISS I need to do with my compliance. They said we aren't accountants or tax-advisers so we can't judge whether the applicant was eligible for SEISS or not. He said as long as we make sure that we've done our due diligence on the business income side (that it's healthy and sustainable) and documented it, it's fine. All this on email too

But I appreciate you probably work with a different set of clients and compliance framework.

_AandL_

@K_S Thank you for clarifying that. That makes sense. Hopefully things will open from the 12th so they can see my income has gone back to it was prior.